EconomyGhanaNews

Ghana’s economy contracts for the first time in 37 years

The Ghana Statistical Service (GSS) says the contraction is largely attributable to restrictions on activity in the economy during the lockdown

Ghana’s economy contracted by an annual 3.2% in the second quarter of this year as coronavirus restrictions stalled activity, the Ghana Statistical Service (GSS) has announced. The contraction is for the first one in 37 years.

Speaking at a press conference in Accra on Wednesday, Professor Samuel Kobina Annim, the Government Statistician, said the shrinkage is attributable largely to restrictions on activity in the economy, which virtually came to a standstill during the partial lockdown in response to the coronavirus outbreak.

“Even after the restrictions have been lifted, many businesses across sectors have continued to close down,” Professor Annim said.

“For the first time in 37 years, Ghana’s economy has seen a contraction of 3.2%, compared with a growth rate of 5.7% in the same quarter in 2019.”

Agriculture shines

He said agriculture was the only sector that recorded positive growth during the period. It produced the economysector s highest growth rate between April and June 2020, expanding by 2.5%.

The fall in output was felt mostly in manufacturing and the services sector, where hotels and restaurants closed to stop the virus spreading. Industry (-5.7%) and services (-2.6%) contracted in the second quarter of 2020.

In agriculture the livestock subsector recorded the highest year-on-year growth of 5.7%. Once again, the forestry and logging recorded the poorest performance, growing by -8.4%.

In industry, the electricity subsector recorded the highest year-on-year quarterly GDP growth rate of 16% while manufacturing recorded the lowest (-14.3%).

The information and communication subsector recorded the highest year-on-year quarterly growth rate at 74.2%, but hotels and restaurants suffered most, recording growth of -79.4%.

The quarter-on-quarter seasonally adjusted GDP growth rate for the second quarter of 2020 was -0.8%. In other words, the value of goods and services produced in Q2 2020 contracted by 0.8% compared to the value recorded in the first quarter of 2020.

Gross domestic product for the second quarter of 2020 at current prices however grew year on year: it was an estimated GHC85.758 billion, against GHC84.312 billion for the second quarter of 2019.

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